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Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity For both the current year and one year ago, compute the following ratios: (1-a) Compute the current ratio for each of the three years. 1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? Required 1A Required 1B Required 2A Required 2B Current Year: 1 Year Ago: 2 Years Ago: Complete this question by entering your answers in the tabs below. Compute the current ratio for each of the three years. Numerator: Current assets Current Year: 1 Year Ago: 2 Years Ago: 1 1 1 1 Current Year 1 Year Ago 2 Years Ago $ 27,733 83,694 104,187 9,115 259,862 $ 484,591 Current Ratio Required 1A Required 18 Required 2A Required 28 + (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. [2-b) Did the acid-test ratio improve or worsen over the three-year period? Compute the acid-test ratio for each of the three years. + Complete this question by entering your answers in the tabs below. Current liabilities Numerator: +Short-term investments $ 121,870 89,281 162,500 110,940 $ 484,591 $ 417,751 $ 341,300 Denominator: + $ 32,417 56,731 77,284 8,860 242,459 $ 417,751 Acid-test ratio + $ 71,306 98,004 162,500 85,941 I = = $ 33,113 45,052 48,465 3,792 210,878 $ 341,300 = = $ 44,151 74,673 163,500 58,976 Current Ratio Current ratio 0 to 1 0 to 1 0 to 1 Denominator: = . . = Acid-Test Ratio Acid-test ratio ▬▬▬ 0 to 1 0 to 1 0 to 1

Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity For both the current year and one year ago, compute the following ratios: (1-a) Compute the current ratio for each of the three years. 1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? Required 1A Required 1B Required 2A Required 2B Current Year: 1 Year Ago: 2 Years Ago: Complete this question by entering your answers in the tabs below. Compute the current ratio for each of the three years. Numerator: Current assets Current Year: 1 Year Ago: 2 Years Ago: 1 1 1 1 Current Year 1 Year Ago 2 Years Ago $ 27,733 83,694 104,187 9,115 259,862 $ 484,591 Current Ratio Required 1A Required 18 Required 2A Required 28 + (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. [2-b) Did the acid-test ratio improve or worsen over the three-year period? Compute the acid-test ratio for each of the three years. + Complete this question by entering your answers in the tabs below. Current liabilities Numerator: +Short-term investments $ 121,870 89,281 162,500 110,940 $ 484,591 $ 417,751 $ 341,300 Denominator: + $ 32,417 56,731 77,284 8,860 242,459 $ 417,751 Acid-test ratio + $ 71,306 98,004 162,500 85,941 I = = $ 33,113 45,052 48,465 3,792 210,878 $ 341,300 = = $ 44,151 74,673 163,500 58,976 Current Ratio Current ratio 0 to 1 0 to 1 0 to 1 Denominator: = . . = Acid-Test Ratio Acid-test ratio ▬▬▬ 0 to 1 0 to 1 0 to 1

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity For both the current year and one year ago, compute the following ratios: (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? Required 1A Required 1B Required 2A Required 2B Current Year: 1 Year Ago: 2 Years Ago: Complete this question by entering your answers in the tabs below. Compute the current ratio for each of the three years. Numerator: Current assets Current Year: 1 Year Ago: 2 Years Ago: I Current Year $ 27,733 83,694 104,187 9,115 259,862 $ 484,591 1 1 1 Required 1A Required 1B Required 2A Required 28 + Current Ratio (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? Compute the acid-test ratio for each of the three years. + Complete this question by entering your answers in the tabs below. + $ 121,870 89,281 162,500 110,940 $ 484,591 $ 417,751 $ 341,300 Numerator: +Short-term investments Current liabilities Denominator: 1 Year Ago $ 32,417 56,731 77,284 8,860 242,459 $ 417,751 + Acid-test ratio $ 71,306 98,004 162,500 85,941 I 1 1 1 = = 2 Years Ago $ 33,113 45,052 48,465 3,792 210,878 $ 341,300 = = $ 44,151 74,673 163,500 58,976 Current Ratio Current ratio 0 to 1 0 to 1 0 to 1 Denominator: = Acid-Test Ratio Acid-test ratio 0 to 1 0 to 1 0 to 1 = - = =
Transcribed Image Text:Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity For both the current year and one year ago, compute the following ratios: (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? Required 1A Required 1B Required 2A Required 2B Current Year: 1 Year Ago: 2 Years Ago: Complete this question by entering your answers in the tabs below. Compute the current ratio for each of the three years. Numerator: Current assets Current Year: 1 Year Ago: 2 Years Ago: I Current Year $ 27,733 83,694 104,187 9,115 259,862 $ 484,591 1 1 1 Required 1A Required 1B Required 2A Required 28 + Current Ratio (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three-year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three-year period? Compute the acid-test ratio for each of the three years. + Complete this question by entering your answers in the tabs below. + $ 121,870 89,281 162,500 110,940 $ 484,591 $ 417,751 $ 341,300 Numerator: +Short-term investments Current liabilities Denominator: 1 Year Ago $ 32,417 56,731 77,284 8,860 242,459 $ 417,751 + Acid-test ratio $ 71,306 98,004 162,500 85,941 I 1 1 1 = = 2 Years Ago $ 33,113 45,052 48,465 3,792 210,878 $ 341,300 = = $ 44,151 74,673 163,500 58,976 Current Ratio Current ratio 0 to 1 0 to 1 0 to 1 Denominator: = Acid-Test Ratio Acid-test ratio 0 to 1 0 to 1 0 to 1 = - = =
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